This would have been a better move at the start or midway point of the console's life cycle, at the end of it the value just isn't there. They say they are positioning themselves to be competitive with Roku, Apple TV and others, but those are a $100 with no fees except for the ones paid to content providers such as Netflix and Hulu (which you would still have to pay for the subsidized Xbox). Not to mention I am sure the PS3 will drop in price this year as well and you can accomplish all of those things and some (Blu Ray player).
Seems like Microsoft is trying to add value to the 360's end life by trying to sell it as a media hub. Monthly fees on top of content subscriber fees I don't think is the best way to do that. But I am sure they feel a little threatened by the PS3's selling power AFTER the next gen begins because it won't just be a cheap system to play PS3 games it will also be a cheap Blu Ray player and media hub with access to many games. Part of the reason the PS2 is still selling is because it is a good DVD player with a huge catalog of games, and the Blu Ray player in the PS3 will help propel it beyond the 360 in sales after the next gen starts. It is sort of like hitting a shot after the game is over, but still a sale is a sale, and both Sony and Microsoft I believe want to continue to sell their current consoles even after the next gen consoles arrive.